Part 2. TEXAS WORKERS' COMPENSATION COMMISSION

Chapter 110. REQUIRED NOTICES OF COVERAGE

Subchapter B. EMPLOYER NOTICES

28 TAC §110.101

The Texas Workers' Compensation Commission (the Commission) adopts the amendment to §110.101, concerning Covered and Non-Covered Employer Notices to Employees, with changes to the proposed text published in the November 19, 1999, issue of the Texas Register (24 TexReg 10273).

As required by the Government Code §2001.033(1), the Commission's reasoned justification for the amendment is set out in this order which includes the preamble, which in turn includes the rule. This preamble contains a summary of the factual basis of the rule, a summary of comments received from interested parties, names of those groups and associations who commented and whether they were for or against adoption of the rule, and the reasons why the Commission disagrees with some of the comments and proposals.

Texas Government Code, §2001.021, allows an interested person to petition the Commission to make changes or additions to Commission rules. The Commission received a rule petition from Mr. Steven C. Bent, Executive Director of Texas Association of Responsible Nonsubscribers (TXANS), considered this petition at its September 2, 1999, public meeting, and initiated the Commission's internal rulemaking process. The petition requested that the wording of the notice required in §110.101(e)(3) be amended to inform employees that their non-covered employer may provide other benefits to them if they are injured on the job and to remove language regarding common law rights which the petitioner felt compelled employees to litigate injury claims. The petitioner suggested that amending the language in this way would inform employees that non-covered employers are not precluded from providing other employment-related injury benefits, would benefit employee/employer relationships and reduce litigation.

There were no changes made to the proposed rule in response to public comment received in writing and at a public hearing held on January 12, 2000. The only change made to the rule as proposed was in subsection (e) where the word "must" in the second sentence was changed to "shall" for consistency.

The amendment is adopted to modify the language in the notice which non-covered employers are required to post in their work place pursuant to Texas Labor code §406.005. This notice informs employees they are not covered by workers' compensation insurance, but may have access to other benefits their employer offers. In addition, the language regarding employee common law rights was modified.

Section 110.101(e)(3) informs employees that, even though they are working for an employer who has opted to not buy workers' compensation insurance, the employer may offer other benefits which the employee may access. The current notice does not reference the fact that non-covered employers can provide other employment-related injury benefits, and some employees who suffer on-the-job injuries may not be aware they are entitled to receive benefits from their non-covered employer. Employees will understand that non-covered employers are not precluded from providing other employment-related injury benefits. In addition, the language regarding common law rights was modified but not eliminated as requested in the petition. Removing all reference to common law rights from the notice may leave employees with the mistaken impression that they have no rights or options (especially if the employer has not chosen to provide some of these "other benefits"). Because the purpose of the notice is to ensure that employees are informed of their rights and options should a workplace injury occur, and because the Texas Workers' Compensation Act explicitly addresses retention of common law rights, the reference to common law rights has not been removed. The title of the notice is not amended because it is consistent with all other notices in the rule.

In addition, the text of the notices contained in paragraphs (e)(1), (e)(2), and (e)(3) were amended by adding the words "in writing" to the sentence informing employees that they should receive coverage information when they are hired and when coverage status changes. This addition makes the notices consistent with subsection (a) of this rule.

Subsection (c) requires that notices posted contain the text prescribed by the rule and that this occur as soon as the rule becomes effective. The previous rule did not require that notices posted in compliance with a prior rule be updated to reflect changes to the notice text. This would defeat the purpose of the text change. Text which is revised to better inform employees of their rights and options, or to comply with statutory changes, must be posted to serve their purpose.

The adopted amendment also standardize the language by changing "must" to "shall" where appropriate throughout this rule to correspond with other rules.

One comment was received from the League of United Latin American Citizens (LULAC) expressing general support.

Summaries of the comments and Commission responses are as follows:

COMMENT: Commenter stated in toto: "need rules in place (law)."

RESPONSE: The Commission agrees that these rules are needed and that they meet statutory requirements and objectives.

The amendment is adopted pursuant to the following statutes: Texas Labor Code, §401.011, which provides the definition of an employer; Texas Labor Code, §402.061, which authorizes the Commission to adopt rules necessary to administer the Act; Texas Labor Code, §406.005, which requires employers to post coverage information in the workplace; Texas Labor Code, §406.010, which authorizes the Commission to adopt rules regarding claims service; Texas Labor Code §406.033, which describes the non-covered employer's common law defenses and burden of proof; Texas Labor Code, §406.034, which allows an employee to elect to retain the common law right of action; Texas Labor Code, §409.043, which requires each employer to notify its employees of the ombudsman program in a manner prescribed by the Commission, Texas Labor Code, §411.081, which requires employers to provide notice of the safety hotline in the manner prescribed by the Commission, and Texas Government Code, §2001, which allows an interested person to petition the Commission to make changes or additions to Commission rules.

§110.101. Covered and Non-Covered Employer Notices to Employees.

(a)

In addition to the posted notice required by subsection (e) of this section, covered and non-covered employers shall notify their employees of coverage status, in writing. This additional notice:

(1)

shall be provided at the time an employee is hired, meaning when the employee is required by federal law to complete both a W-4 form and an I-9 form or when a break in service has occurred and the employee is required by federal law to complete a W-4 form on the first day the employee reports back to duty;

(2)

shall be provided at the time the employer notifies the insurance carrier that the employer is dropping coverage if there will be a period during which the employees will not be covered;

(3)

shall be provided at the time an employer obtains coverage, as necessary to allow the employee to elect to retain common law rights;

(4)

shall include the text required in the posted notice; and

(5)

if the employer is covered by workers' compensation insurance, or becomes covered, whether by commercial insurance or by becoming a certified self-insurer, shall include the following statement: "You may elect to retain your common law right of action if, no later than five days after you begin employment or within five days after receiving written notice from the employer that the employer has obtained coverage, you notify your employer in writing that you wish to retain your common law right to recover damages for personal injury. If you elect to retain your common law right of action, you cannot obtain workers' compensation income or medical benefits if you are injured."

(b)

Notices required to be posted by this rule shall be posted:

(1)

by the non-subscribing employer as provided in subsection (c) of this section;

(2)

by the employer who is opting out of workers' compensation, at the time the employer notifies the carrier of the cancellation;

(3)

by the employer or certified self-insurer who elects to cancel their policy or withdraw from self-insurance, at the time the insurance carrier is notified of the cancellation or the Commission is notified of the withdrawal, unless a new policy will maintain continuous coverage in which case the employees will be notified at the time the new policy takes effect;

(4)

by the employer who becomes covered either by an insurance policy or by certified self-insurance, at the time coverage or certification takes effect; and

(5)

by the employer whose workers' compensation policy is canceled by the insurance carrier, at the time the cancellation becomes effective if no new policy is obtained.

(c)

Notices posted or provided on and after the effective date of this rule shall contain the specific text required by this rule. Notices posted prior to the effective date of this rule shall, be replaced with the text required by this rule. Any time the information regarding coverage status, insurance carrier, safety hotline number, or third party administrator changes, the notice shall be updated to reflect current information.

(d)

An employer who recruits an employee in Texas to perform services outside of Texas, actually hires outside of Texas, and has notices of coverage posted conspicuously at the place of hire and at the business location where the employee will perform services, is not required to provide the additional notice required in subsection (a) of this section to the employee.

(e)

Covered and non-covered employers shall post notices in the workplace to inform employees about workers' compensation issues as required by this rule. These notices shall be posted in the personnel office, if the employer has a personnel office, and in the workplace where each employee is likely to see the notice on a regular basis. The notices shall be printed with a title in at least 30 point bold type, subject in at least 20 point bold type, and text in at least 19 point normal type, and shall include ENGLISH, SPANISH, and any other LANGUAGE common to the employer's employee population. The text for the notices shall be the text provided by the Commission on the sample notice without any additional words or changes.

(1)

Employers insured through a commercial insurance company shall post the following notice:

Figure: 28 TAC §110.101(e)(1)

(2)

Employers who become certified self-insurers shall post the following notice:

Figure: 28 TAC §110.101(e)(2)

(3)

Employers who elect not to be covered by workers' compensation, or who cancel or terminate coverage shall post the following notice:

Figure: 28 TAC §110.101(e)(3)

(f)

Failure to post or to provide notice as required in this rule is a violation of the Act and Commission rules and the violator may be subject to administrative penalties.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on April 20, 2000.

TRD-200002817

Susan Cory

General Counsel

Texas Workers' Compensation Commission

Effective date: August 1, 2000

Proposal publication date: November 19, 1999

For further information, please call: (512) 804-4287

28 TAC §§141.3, 141.6, 141.7

The Texas Workers' Compensation Commission (the Commission) adopts the amendments to §141.3, concerning Failure to Attend a Benefit Review Conference; §141.6, concerning Interlocutory Orders; and §141.7, concerning Commission Actions After a Benefit Review Conference. Sections 141.6 and 141.7 are adopted with changes to the proposed text published in the November 19, 1999, issue of the Texas Register (24 TexReg 10294). Section 141.3 is adopted without change to the proposal as published in the November 19, 1999, issue of the Texas Register (24 TexReg 10294) and will not be republished.

As required by the Government Code §2001.033(1), the Commission's reasoned justification for this rule is set out in this order which includes the preamble, which in turn includes the rule. This preamble contains a summary of the factual basis of the rule, a summary of comments received from interested parties, names of those groups and associations who commented and whether they were for or against adoption of the rule, and the reasons why the Commission disagrees with some of the comments and proposals.

Changes made to the proposed rule are in response to public comment received in writing and at a public hearing held on January 12, 2000, and are described in the summary of comments and responses section of this preamble. Changes have been made for consistency or to correct typographical or grammatical errors.

The amendments address new legislation enacted by the 76th Texas Legislature. House Bill 2512 amended the language contained in §410.032 of the Texas Labor Code regarding the issuance of an interlocutory order by a benefit review officer. As amended, the statute authorizes a benefit review officer to issue an interlocutory order for payment of all or part of medical or income benefits. The rule now contains specific guidance, as currently contained in interlocutory orders, regarding the effective date of an order to pay benefits and the due date for payment of benefits under the interlocutory order. The amendments specify that payment of benefits based on an interlocutory order for accrued and unpaid benefits must include interest on any accrued and unpaid benefits due. The amendments also add provision for an interlocutory order to pay medical benefits, as the amended statute allows. In addition, the amendments remove specific language regarding enforcement and violations and update citations to the Workers' Compensation Act.

Changes in the proposed text are described and discussed in the summary of comments and responses section of this preamble. Specifically, changes were made to subsections (b) and (c) of §141.6.

Comments regarding the proposed amendments were received from the following groups: the League of United Latin American Citizens (LULAC), Flahive, Ogden & Latson and The Texas Workers' Compensation Fund.

Flahive, Ogden & Latson expressed disagreement with issues regarding the issuing of Interlocutory Orders by a Benefit Review Officer. The Texas Workers' Compensation Fund expressed general support of the amendments with clarification and suggestions regarding revised language.

Summaries of the comments and Commission responses are as follows:

Comment: Commenter stated in toto: "need rules in place (law)."

Response: The Commission agrees that these rules are needed and that they meet statutory requirements and objectives.

Comment: Commentor expressed concern that the proposed language could allow a benefit review officer to specify any due date for payment of benefits in accordance with an interlocutory order. The benefit review officer could theoretically require payment within one day of the carrier's receipt of the order, which would be difficult if not impossible.

Response: The Commission agrees. The time frame for compliance with an interlocutory order has been established as 5 days from receipt of the order, by the terms of the interlocutory order itself. The language of the rule regarding the compliance date in turn impacts the effective date of an interlocutory order. The intent of the new rule was to provide specific guidance regarding the effective date and a compliance date for payment of benefits due under the interlocutory order issued by a benefit review officer or hearing officer. The effective date and the compliance date as proposed in the rules were not intended to change those dates that exist in the interlocutory order form (H&R8) that has been in use since July 1994. The proposed wording would have allowed the time frames associated with the effective date or due date for payment of income benefits to be modified resulting in inconsistent payment due dates and effective dates, and for timeframes of less than 5 days for compliance. As noted by the commenter, payments within one day would be difficult. Allowing benefit review officer's discretion as to time frames would negate the benefit of having the rule set timeframes that are consistent and known to all, thus reducing disputes and increasing compliance.

Accordingly, §141.6(c) has been changed to provide that the effective date of an interlocutory order is the date signed by the officer and §141.6(b) has been changed to allow the full 5 day compliance time frame. In addition the word "calendar" was removed to be consistent with §102.3 of this title (relating to Computation of Time) which provides that the term "day" means "calendar day." Subsections (b) and (c) now read as follows:

"(b) An interlocutory order for payment of income or medical benefits shall be effective on the date signed by the benefit review officer."

"(c) An insurance carrier shall comply with an interlocutory order to pay accrued benefits by issuing and delivering payment for income benefits accrued and unpaid no later than the fifth (5th) day after receiving the order and shall pay benefits in accordance with the order as and when they accrue."

Comment: Commenter noted that under the proposed change to §141.6, a benefit review conference officer may no longer issue an interlocutory order directing carriers to stop paying benefits. The Commenter contended that the legislature did not intend to take authority away from benefit review conference officers so they would no longer be able to order carriers to stop paying benefits. Commenter went on to assert that the Legislature intended the Commission to retain the authority to order the suspension of benefits. Otherwise, the language "or not paid" would have been excised from the statute. Commenter contended that, an order "for the payment benefits" means an order regarding the payment of benefits, which means to pay or not pay those benefits. To interpret this otherwise renders the words "or not paid" superfluous and meaningless. Commenter felt that the decision of the Legislature to drop the language to pay or not pay the benefits simply removes a redundancy and nothing more than that. Thus, a Benefit Review Officer may order that payments be paid or that payments may be suspended. Either order has to do with the payment of benefits.

Commentor also asserted that this change may increase claims against the Subsequent Injury Fund threatening its financial viability and similarly limit the authority of hearing officers.

Response: The Commission disagrees. Before the amendment to §410.032 it provided:

"(a) If a benefit review officer recommends that benefits be paid or not paid, the benefit review officer may issue an interlocutory order to pay or not pay the benefits."

Particularly significant is the fact that the phrase, "to pay or not pay the benefits" was deleted from the section as amended. The Commission was unable to find any information in the legislative history records that show the legislative intent was to continue to allow an officer to issue an interlocutory order not to pay benefits and it would be inappropriate for the Commission by its rule to attempt to change the statute.

An interlocutory order issued by a benefit review officer to "not pay" benefits should not impact claims against the Subsequent Injury Fund. Claims against the Subsequent Injury Fund may be valid if overpayment is made under an interlocutory order and the interlocutory order is reversed or modified by final arbitration, order, or a decision of the Commission or court. It is rare that, at the time of a benefit review conference, there is an existing interlocutory order in effect to pay benefits that potentially could be suspended by a subsequent interlocutory order; thus, providing some protection to the Subsequent Injury Fund. Claims against the Subsequent Injury Fund result only from those interlocutory orders issued by a benefit review officer "to pay" benefits.

The amendments are adopted pursuant to the Texas Labor Code §402.061 which requires the Commission to adopt rules necessary for the implementation and enforcement of the Texas Workers Compensation Act; Texas Labor Code § 408.081, as amended by the 76th Legislature, which sets out provisions regarding an employee's entitlement to income benefits; Texas Labor Code §410.027, which authorizes the Commission to adopt rules regarding the conduct of benefit review conferences; Texas Labor Code, §410.032, which provides a benefit review officer the authority to enter interlocutory orders; Texas Labor Code §410.033, which allows a benefit review officer to issue an interlocutory order in disputes involving two or more insurance carriers; Texas Labor Code §410.209, which provides for the reimbursement of an insurance carrier for overpayment of benefits resulting from an interlocutory order.

§141.6. Interlocutory Orders.

(a)

At the close of the benefit review conference, the benefit review officer may enter interlocutory orders as follows:

(1)

when the benefit dispute involves payment of benefits, the benefit review officer may order the carrier to pay all or part of medical or income benefits. The order may address either or both accrued and future benefits. Such an order is binding until reversed or modified by an agreement or settlement, as provided by §147.7 of this title (relating to Effect on Previously-Entered Decisions and Orders), by an interlocutory order or by a decision rendered after a subsequent Commission proceeding;

(2)

when the benefit dispute involves the liability of two or more carriers for compensation for one or more compensable injuries, the benefit review officer may order each carrier to pay a proportionate share, determined by dividing the compensation due by the number of carriers involved.

(b)

An interlocutory order for payment of income or medical benefits shall be effective on the date signed by the benefit review officer.

(c)

An insurance carrier shall comply with an interlocutory order to pay accrued benefits by issuing and delivering payment for income benefits accrued and unpaid no later than the fifth day after receiving the order and shall pay benefits in accordance with the order as and when they accrue.

(d)

Payment of accrued and unpaid income benefits paid in accordance with an interlocutory order shall include interest pursuant to the Texas Labor Code, §408.064 and §408.081.

(e)

Payment of medical benefits pursuant to an interlocutory order shall be made in accordance with Chapters 408 and 413 of the Texas Labor Code.

(f)

Copies of an interlocutory order entered under this rule will be provided to the parties within three days of the close of the benefit review conference by facsimile or electronic transmission, personal delivery, or first class mail.

§141.7. Commission Actions After a Benefit Review Conference.

(a)

If all disputed issues are resolved at the benefit review conference by agreement, the benefit review officer shall make the agreement part of the claim file, and return the file for ordinary handling

(b)

If all disputed issues are resolved at the benefit review conference by settlement, the benefit review officer shall submit the signed settlement to the director of the hearings division, for handling as provided by Chapter 147 of this title (relating to Dispute Resolution by Agreement or Settlement). If the director rejects the settlement, the parties may request a subsequent benefit review conference as provided by §141.1 of this title (relating to Requesting and Setting a Benefit Review Conference).

(c)

If all disputed issues are not resolved at the benefit review conference, no later than the fifth day after the close of the benefit review conference, the benefit review officer shall submit a written report, as provided by §410.031 of the Texas Labor Code, including any signed agreement, and a copy of any interlocutory order entered, to the director of the hearings division.

(d)

No later than the eighth days after receiving the benefit review officer's report, the director of the hearings division shall furnish, by first class mail or personal delivery, to the claimant; claimant's representative, if any; the insurance carrier; and the employer the following:

(1)

a file-stamped copy of the report; and

(2)

notice of the date, time, estimated duration, and location of the contested case hearing.

(e)

The director shall additionally furnish the following:

(1)

a statement of the parties' right to elect, by mutual agreement, dispute resolution by binding arbitration in lieu of a benefit contested case hearing;

(2)

a detailed explanation of the differences between dispute resolution by benefit contested case hearing and binding arbitration; and

(3)

a Commission-prescribed form to elect, by mutual agreement, dispute resolution by binding arbitration.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on April 20, 2000.

TRD-200002818

Susan Cory

General Counsel

Texas Workers' Compensation Commission

Effective date: May 10, 2000

Proposal publication date: November 19, 1999

For further information, please call: (512) 804-4287

28 TAC §§142.1 - 142.5, 142.9, 142.12, 142.16, 142.20

The Texas Workers' Compensation Commission (the Commission) adopts amendments to §142.1, concerning Application of the Administrative Procedure Act; §142.2, concerning Authority of the Hearing Officer; §142.3, concerning Ex Parte Communications; §142.4, concerning Delivery of Copies to All Parties; §142.5, concerning Sequence of Proceedings to Resolve Benefit Disputes; §142.9, concerning Stipulations, Agreements, and Settlements; §142.12, concerning Subpoena; §142.16, concerning Decision, and adoption of new §142.20, concerning Interlocutory Orders. Sections 142.2 - 142.5, 142.9, 142.12, 142.16, 142.20 are adopted with changes to the proposed text published in the November 19,1999, issue of the Texas Register (24 TexReg 10297). Section 142.1 is adopted without change to the proposal as published in the November 19,1999, issue of the Texas Register (24 TexReg 10297) and will not be republished.

As required by the Government Code §2001.033(1), the Commission's reasoned justification for this rule is set out in this order which includes the preamble, which in turn includes the rule. This preamble contains a summary of the factual basis of the rule, a summary of comments received from interested parties, names of those groups and associations who commented and whether they were for or against adoption of the rule, and the reasons why the Commission disagrees with some of the comments and proposals.

Changes made to the proposed rule are in response to public comment received in writing and at a public hearing held on January 12, 2000, and are described in the summary of comments and responses section of this preamble. Other changes were made for consistency or to correct typographical or grammatical errors.

The amendments are adopted in response to new legislation enacted by the 76th Texas Legislature. House Bill 2512 amended the language contained in Texas Labor Code §410.032 regarding interlocutory orders by a benefit review officer and added to §410.168 regarding the decision and interlocutory orders of the hearing officer. Section 410.032 was amended to authorize a benefit review officer to issue an interlocutory order for payment of all or part of medical benefits or income benefits. The order may address either or both accrued and future benefits. The addition of §410.168(b) provides that a hearing officer may address either or both accrued and future benefits in a decision. The addition of §410.168(c) provides that the hearing officer may issue an interlocutory order for payment of all or part of income benefits or medical benefits, that the interlocutory order may address either or both accrued and future benefits, and that the interlocutory order is binding during the pendency of an appeal to the Appeals Panel.

An interlocutory order is interim pending a final resolution of a dispute. Under the statutory changes, an interlocutory order can be issued by a hearing officer and may remain in effect through the conclusion of an appeal to the Appeals Panel. Consequently, benefit payments ordered in a decision may be due and payable at an earlier date when the decision contains an interlocutory order; otherwise, a carrier has up to 20 days from the date the decision becomes final to make benefit payments in accordance with a decision that is not appealed. Pursuant to §410.202(a), a party has 15 days from the date of receipt of a decision to file a written request for appeal. Although §410.169 specifies that a decision of the hearing officer is binding during pendency of an appeal, the current rules do not assign a date by which benefit payments must be made during an appeal. Because this has been a matter of controversy, the rules provide a remedy by establishing a payment due date of five (5) days from the day the appeal is filed. The proposed wording would have allowed the time frames associated with the effective date or due date for payment of income benefits to be modified resulting in inconsistent payment due dates and effective dates, and for timeframes of less than 5 days for compliance. As noted by the commenter, payments within one day would be difficult. Allowing benefit review officer's discretion as to time frames would negate the benefit of having the rule set timeframes that are consistent and known to all, thus reducing disputes and increasing compliance.

Under the amendments to Texas Labor Code §410.168, the hearing officer has authority to issue interlocutory orders to pay all or part of medical or income benefits. New §142.20 is consistent with the existing provisions currently used in benefit review officer's interlocutory orders regarding the effective date of an order to pay benefits and the due date for payment of benefits. The new rule also specifies that payment of accrued benefits based on an interlocutory order must include interest on any accrued unpaid benefits even if not included in the order and adds provisions for an interlocutory order to pay medical benefits, as the amended statute allows.

Amendments to §142.12(e)(2) is amended to include, "any person who is not a party and is 18 years of age or older" as an appropriate person to serve a subpoena in accordance with §176.5 of the Texas Rules of Civil Procedure.

Section 142.16(b) revises the provisions regarding attorney fees so that they are consistent with Texas Labor Code §410.168. A provision that gives the hearing officers the discretion to include an interlocutory order in their contested case hearing decisions has been added

Other amendments update citations to the Texas Workers Compensation Act resulting from codification of the Act into the Texas Labor Code, and codification of the Administrative Procedure and Texas Register Act into the Texas Government Code.

Changes in the proposed text are described and discussed in the summary of comments and responses section of this preamble. Specifically, changes were made to subsections (e), (f) and (h) of §142.16 and to subsections (b), (c) and (d) of §142.20.

Comments regarding the proposed amendments were received from the following groups: the League of United Latin American Citizens (LULAC), Flahive, Ogden & Latson and The Texas Workers' Compensation Fund.

Flahive, Ogden & Latson expressed disagreement with issues regarding the issuing of Interlocutory Orders by benefit review officers and hearing officers. The League of United Latin American Citizens (LULAC) did not express opposition or support. The Texas Workers' Compensation Fund expressed general support of the amendments with clarifications and suggestions regarding revised language.

Summaries of the comments and Commission responses are as follows:

Comment: Commenter stated in toto: "need rules in place (law)."

Response: The Commission agrees that these rules are needed and that they meet statutory requirements and objectives.

Comment: Hearing officers have the authority to issue interlocutory orders directing carriers not to pay benefits. The commentor's assertion was made with respect to both §142.16 and §141.6, with primary emphasis on §141.6. Commentor states that under the proposed change to §141.6, a benefit review conference officer may no longer issue an interlocutory order directing carriers to stop paying benefits. The Commenter contended that the legislature did not intend to take authority away from benefit review conference officers so they would no longer be able to order carriers to stop paying benefits. Commenter went on to assert that the Legislature intended the Commission to retain the authority to order the suspension of benefits. Otherwise, the language "or not paid" would have been excised from the statute. Commenter contended that, an order "for the payment benefits" means an order regarding the payment of benefits, which means to pay or not pay those benefits. To interpret this otherwise renders the words "or not paid" superfluous and meaningless. Commenter felt that the decision of the Legislature to drop the language to pay or not pay the benefits simply removes a redundancy and nothing more than that. Thus, a Benefit Review Officer may order that payments be paid or that payments may be suspended. Either order has to do with the payment of benefits.

Commentor also asserted that this change may increase claims against the Subsequent Injury Fund threatening its financial viability and similarly limit the authority of hearing officers.

Response: The Commission disagrees. Before the amendment to §410.032 it provided:

"(a) If a benefit review officer recommends that benefits be paid or not paid, the benefit review officer may issue an interlocutory order to pay or not pay the benefits."

Particularly significant is the fact that the phrase, "to pay or not pay the benefits" was deleted. With the legislature removing the specific authorization to order carriers not to pay benefits, a reasonable interpretation is that the legislature intended to remove that authority from benefit review officers.

Until §410.168 was amended, there was no provision regarding the authority of a hearing officer to issue interlocutory orders. As amended it provides:

"(c) The hearing officer may enter an interlocutory order for the payment of all or part of medical benefits or income benefits. The order may address accrued benefits, future benefits, or both accrued benefits and future benefits. The order is binding during the pendency of an appeal to the appeals panel."

The amendments to both §410,032 and §410.168 were in the same bill, House Bill 2512. The language with respect to ordering the payment of benefits in both sections is identical and neither section authorizes an order directing a carrier to stop paying benefits. With respect to benefit review officers, because the legislature removed the specific authorization to order carriers not to pay benefits, the Commission has interpreted that the legislature intended to remove that authority. The Commission was unable to find any information in the legislative history records that show legislative intent to continue to allow a benefit review officer to issue an interlocutory order not to pay benefits. Because the authority for benefit review officers to issue orders directing carriers to stop paying benefits was removed, and because hearing officers were not specifically granted the authority to issue orders directing carriers to stop paying benefits, a reasonable interpretation is that the legislature did not intend by this statutory provision to give hearing officers the authority to issue orders to direct carriers to stop paying benefits and it would be inappropriate for the Commission by its rule to attempt to change the statute.

Hearing officers issue decisions and orders at the conclusion of their contested case hearings. If benefits are not due, the decision directs carriers not to pay benefits and there is no need to issue an interlocutory order for that same purpose.

While reimbursement claims against the Subsequent Injury Fund result from a hearing officer's order "to pay" benefits, the absence of an interlocutory order issued by a hearing officer to "not pay" benefits could impact the SIF, because an interlocutory order to stop payments could be entered and effective sooner than a final decision and order would be. The potential for this impact was, however, created by the statutory amendments.

Comment: Please explain under what circumstances would an Interlocutory Order supersede a decision entered by a hearing officer.

Response: Under the act and rules, an interlocutory order can only supercede a decision from the time the decision is effective until the time for an appeal to the Appeals Panel has expired or while an appeal to the Appeals Panel is pending. If benefits are determined to be due, a hearing officer may use an interlocutory order to provide for the expedited payment of benefits. Additionally, in cases where an appeal may result in a reversal or modification of the decision, a hearing officer may use an interlocutory order to reduce the potential liability of the Subsequent Injury Fund by entering an order for a partial payment of benefits when there is a substantial amount of accrued benefits due as a result of the decision and a partial payment would be appropriate under the circumstances.

Comment: Commenter felt that proposed §142.16(f) was in conflict with proposed §142.16(e). Subsection (e) says an order is binding on the date signed, or otherwise established in the decision and order. Subsection (f) says the order becomes final and binding 16 days after receipt from the division of hearings, if not appealed.

Response: Commission agrees. Subsection (e) is intended to provide that an order is effective and binding on the date signed by the hearing officer. Subsection (f) is only intended to provide the date a decision becomes final if the decision is not appealed. Additionally subsection (h) is affected by the corrections to subsection (e) as it provides a compliance date for the payment of benefits resulting from a decision that is not appealed and does not contain an interlocutory order. The proposed wording could allow the time frames associated with the effective date to be modified in the decision resulting in inconsistent payment due dates and effective dates, and for timeframes of less than 5 days for compliance. As noted by the commenter, payments within one day would be difficult. Allowing hearing officers' discretion as to time frames would negate the benefit of having the rule set timeframes that are consistent and known to all and thus reducing disputes and increasing compliance. In addition the word "calendar" was removed from subsection (h) to be consistent with §102.3 of this title (relating to Computation of Time) which provides that the term "day" means "calendar day."

Accordingly, Subsection (e), (f) and (h) now read as follows:

"(e) A decision issued under this section shall be effective and binding on the date signed by the hearing officer unless superceded by an interlocutory order contained in the decision, if any."

"(f) A decision regarding benefits not appealed to the appeals panel, as provided by the Texas Labor Code, §410.202 and Chapter 143 of this title, becomes final on the sixteenth day after the date received from the division of hearings. Parties shall comply with a final decision or order within 20 days of the date it becomes final as provided by the Texas Labor Code, §410.208."

"(h) Parties shall comply with a decision regarding benefits appealed to the appeals panel that does not contain an interlocutory order by issuing and delivering payment of accrued and unpaid income benefits no later than the fifth (5th) day after filing a written request for appeal with the appeals panel as provided by the Texas Labor Code, §410.202, and Chapter143 of this title."

Comment: Commenter felt that subsection (g) was a re-worded repetition of subsection (e). By its definition, a binding order is enforceable and payable during the appeal process.

Response: Commission disagrees. Subsection (g) establishes the requirement to pay benefits during the pendency of the appeal. It also allows the hearing officer's interlocutory order (if issued) to take precedence over the written decision.

Comment: Commenter expressed concern that the proposed language could allow a hearing officer to specify any due date for payment of benefits in accordance with an interlocutory order. The hearing officer could theoretically require payment within one day of the carrier's receipt of the order, which would be difficult if not impossible.

Response: The Commission agrees. The time frame for compliance with an interlocutory order is established as 5 days from receipt of the order. The language of the rule regarding the compliance date in turn impacts the effective date of an interlocutory order. The intent of the new rule was to provide specific guidance regarding the effective date and a compliance date for payment of benefits due under the interlocutory order issued by a hearing officer. The effective date and the compliance date as proposed in the rules were based on the same dates that exist in the interlocutory order form that has been in use since July 1994. There was no intent to change the time frames associated with those effective dates or due dates for payment of income benefits resulting from an interlocutory order.

Accordingly, §142.20(c) has been changed to provide that the effective date of an interlocutory order is the date signed by the hearing officer and §142.20(d) has been changed to allow the full 5 day compliance time frame. Given the effect of the changes to subsection (c) and (d) regarding the effective date and the compliance date, §142.20(b) has been changed to clarify that the interlocutory order cannot provide a separate effective date or compliance date that could alter the period that an interlocutory order remains in effect per the subsection. In addition the word "calendar" was removed from subsection (d) to be consistent with §102.3 of this title (relating to Computation of Time) which provides that the term "day" means "calendar day."

Accordingly, Subsections (b), (c) and (d) now read as follows:

"(b) An interlocutory order contained in a decision supercedes the decision as it pertains to the payment of income benefits or medical benefits and remains in effect until: (1) the decision becomes final in accordance with subsection (f) of §142.16 of this title (relating to the Decision); (2) the decision of the appeals panel is issued pursuant to the Texas Labor Code, § 410.204, and Chapter 143 of this title, if appealed to the appeals panel as provided by the Texas Labor Code, §410.202, and Chapter 143 of this title and the decision and order are affirmed or an appeals panel decision reverses the hearing officer's decision and renders a decision; (3) reversed or modified by an agreement or settlement, as provided by §147.7 of this title (relating to Effect on Previously-Entered Decisions and Orders); or (4) reversed or modified by a subsequent interlocutory order or decision issued after remand from the appeals panel pursuant to the Texas Labor Code, §410.203, and Chapter 143 of this title."

"(c) An interlocutory order for payment of income benefits or medical benefits shall be effective on the date signed by the hearing officer."

"(d) A party shall comply with an interlocutory order by issuing and delivering payment of accrued and unpaid income benefits no later than the fifth (5th) day after receiving the interlocutory order to pay accrued and unpaid benefits, and shall pay benefits in accordance with the interlocutory order as and when they accrue."

The amendments and new rule are adopted pursuant to the Texas Labor Code §402.061 which requires the Commission to adopt rules necessary for the implementation and enforcement of the Texas Workers Compensation Act. Texas Labor Code §406.010, which authorizes the Commission to adopt rules regarding claims service; Texas Labor Code §408.081 as amended by the 76th Legislature, which sets out the provisions for an employer's entitlement to income benefits; Texas Labor Code §410.168, which provides a hearing officer the authority to enter interlocutory orders; Texas Labor Code, §410.169, which sets out the effect of a decision pending appeal; Texas Labor Code, §410.209, which provides for the reimbursement of an insurance carrier for overpayment of benefits resulting from an interlocutory order or decision.

§142.2. Authority of the Hearing Officer.

The hearing officer is authorized to:

(1)

issue subpoenas;

(2)

rule on requests;

(3)

issue orders, including interlocutory orders;

(4)

use summary procedures as provided by §142.8 of this chapter (relating to Summary Procedures);

(5)

direct parties to appear at a prehearing conference to resolve evidentiary and procedural issues;

(6)

establish time limits for conducting a hearing;

(7)

administer oaths;

(8)

rule on the admissibility of evidence;

(9)

determine the relevancy, materiality, weight, and credibility of evidence;

(10)

request additional evidence;

(11)

take official notice of the law of Texas and other jurisdictions, Texas city and county ordinances, the contents of the Texas Register , the rule of state agencies, facts that are judicially cognizable, and generally recognized facts within the Commission's specialized knowledge;

(12)

examine parties and witnesses, and permit examination and cross-examination of parties and witnesses;

(13)

recess, postpone, or dismiss a hearing; and

(14)

take any other action as authorized by law, or as may facilitate the orderly conduct and disposition of the hearing.

§142.3. Ex Parte Communications.

(a)

No person, except as otherwise provided in subsection (c) of this section may communicate, either directly or indirectly, with the hearing officer regarding any facts, issues, law or rules relating to the benefit contested case hearing after the hearing has been set, and until all administrative and judicial remedies have been exhausted, unless all parties to the hearing are present, except where the communication is:

(1)

written; and

(2)

delivered to all parties, as provided by §142.4 of this title (relating to Delivery of Copies to All Parties).

(b)

Notwithstanding subsection (a) of this section, any of the individuals named in subsection (a) may communicate with the hearing officer in any manner regarding procedural issues.

(c)

A hearing officer assigned to render a decision in a benefit contested case hearing, may communicate ex parte with other Commission employees for the purpose of utilizing their special skills or knowledge in evaluating the evidence.

§142.4. Delivery of Copies to All Parties.

A party who sends a document relating to a benefit contested case hearing to the Commission shall also deliver copies of the document to all other parties, or their representatives or attorneys. Delivery shall be accomplished by presenting in person, mailing by first class mail, facsimile or electronic transmission. The document sent to the Commission shall contain a statement certifying delivery. The following statement of certification shall be used: "I hereby certify that I have on this ______ day of ____________, _______, delivered a copy of the attached document to (state the names of all parties to whom a copy was delivered) by (state the manner of delivery)."

§142.5. Sequence of Proceedings to Resolve Benefit Disputes.

(a)

Usual sequence. Except as provided in this section, parties to a benefit dispute are required to attempt to resolve the dispute by mediation at a benefit review conference before proceeding to a contested case hearing or to arbitration by mutual election.

(b)

Guidelines for preceding directly to a benefit contested case hearing. Parties may proceed directly to a contested case hearing without attending a benefit review conference if the Commission determines that:

(1)

mediation would not prove effective to resolve the dispute;

(2)

necessary evidence cannot be obtained without subpoena; or

(3)

the situation of the parties or the nature of the facts or law of the case is such that the overall policy of the Act would be advanced by proceeding directly to a contested case hearing.

(c)

Requesting a hearing. A party may request the Commission to set a benefit contested case hearing. The request shall be made in the following manner:

(1)

If the party is represented, the request shall:

(A)

be made in writing and signed by the requestor;

(B)

identify and describe the disputed issue or issues;

(C)

state the reason for requesting the hearing;

(D)

be sent to the Commission; and

(E)

be delivered to all the other parties, as provided by §142.4 of this chapter (relating to Delivery of Copies to All Parties).

(2)

An unrepresented claimant may request a hearing by contacting the Commission in any manner.

(d)

Commission action on a request for hearing. The Commission will rule on the request, and notify the parties. A ruling granting the request will include a notice of hearing, as provided in §142.6 of this chapter (relating to Setting a Benefit Contested Case Hearing). A ruling denying the request may include a notice of benefit review conference.

(e)

Response. If a hearing is set upon request, the other party or parties may submit a response. The response shall:

(1)

be made in writing and signed;

(2)

describe and explain the party's position on the dispute or disputes;

(3)

be sent to the Commission no later than five days before the hearing; and

(4)

be delivered to all other parties, as provided by §142.4 of this title (relating to Delivery of Copies to All Parties).

(f)

An unrepresented claimant may respond by contacting the Commission in any manner.

§142.9. Stipulations, Agreements, and Settlements.

(a)

At any time before or during the hearing, parties may:

(1)

enter into stipulations, as provided by §140.1 of this title (relating to Definitions);

(2)

resolve one or more benefit disputes by agreement; or

(3)

resolve all benefit disputes by settlement.

(b)

Stipulations shall be made as follows:

(1)

Stipulations made before the hearing shall be:

(A)

made in writing;

(B)

signed by all parties to the stipulation, or their representative; and

(C)

sent to the Commission no later than the day before the hearing.

(2)

Stipulations may be made orally at a hearing and preserved in the record.

(c)

Agreements and Settlements shall be made as provided by Chapter 147 of this title (relating to Dispute Resolution by Agreement or Settlement).

§142.12. Subpoena.

(a)

Definitions. The following words and terms, as used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1)

Evidence - Testimony or documents, including books, papers, and tangible things.

(2)

Service - Delivery of a subpoena by an authorized individual to the person to whom it is addressed.

(3)

Subpoena - A Commission order issued by the hearing officer requiring a person to attend or to produce evidence at a deposition (deposition subpoena) or at a hearing (hearing subpoena).

(b)

How issued. The Commission may issue a subpoena:

(1)

on its own motion; or

(2)

at the request of a party, if the hearing officer determines the party has a good cause.

(c)

Request for subpoena. A party may request a subpoena in the following manner:

(1)

If the party is represented, the request shall:

(A)

be in writing;

(B)

identify the evidence to be produced, and explain why it is relevant to a disputed issue;

(C)

state whether the subpoena is for a deposition or a hearing;

(D)

be sent to the Commission ; and

(E)

be delivered to all parties, as provided by §142.4 of this chapter (relating to Delivery of Copies to All Parties).

(2)

An unrepresented claimant may request a subpoena by contacting the Commission in any manner, and may also request the Commission to arrange for service, if service will be at no cost to the Commission.

(d)

Special provisions for hearing subpoenas. A request for a hearing subpoena shall be sent to the Commission and delivered to the parties, as provided by §142.4 of this chapter (relating to Delivery of Copies to All Parties), no later than ten days before the hearing. The hearing officer may deny a request for a hearing subpoena upon a determination that the testimony may be adequately obtained by deposition or written affidavit.

(e)

Service. Upon granting a request and issuing a subpoena, the hearing officer shall:

(1)

return it to the requester for service, according to §176.5, Texas Rules of Civil Procedure; or

(2)

send it to the appropriate sheriff or constable, or any person who is not a party and is 18 years of age or older for service, if an unrepresented claimant has requested the Commission to arrange for service, as provided by subsection (c)(2) of this section.

(f)

Costs.

(1)

Except as provided by subsection (c)(2) of this section, the party requesting the subpoena is responsible for all costs associated with the subpoena, including service, witness fees, and mileage.

(2)

A witness or deponent who is not a party and who is subpoenaed or otherwise compelled to attend a hearing or deposition to give testimony or produce documents is entitled to receive from the party requesting the subpoena:

(A)

a fee of $30 a day for each day or part of a day the person is necessarily present as a witness or deponent;

(B)

mileage at the rate set for state employees in the General Appropriations Act, for going to, and returning from the place of the hearing or the place of the deposition, if the place is more than 25 miles from the person's place of residence; and

(C)

fees for providing expert testimony relating to medical issues shall be paid according to guidelines established by the Commission pursuant to the Texas Labor Code, Chapter 413.

(g)

A subpoena may be enforced in the manner provided by the Government Code §201.201 and the Texas Labor Code.

§142.16. Decision.

(a)

After the record closes, the hearing officer shall issue a decision on benefits. The decision shall:

(1)

be in writing;

(2)

include findings of fact and conclusions of law; a determination of whether benefits are due; and, if so, an award of benefits due; and

(3)

be signed by the hearing officer.

(b)

On a form prescribed by the Commission the hearing officer shall issue a separate written decision regarding attorney's fees and any matter related to attorney fees. A decision on income or medical benefits may include an interlocutory order at the discretion of the hearing officer.

(c)

No later than the tenth day after the close of the hearing, the hearing officer shall file all decisions with the division of hearings.

(d)

No later than seven days after filing the decision, the division shall furnish to the parties, by first class mail or personal delivery:

(1)

a file-stamped copy of the decision; and

(2)

a statement specifying the place, manner, and time period within which an appeal must be filed.

(e)

A decision issued under this section shall be effective and binding on the date signed by the hearing officer unless superceded by an interlocutory order contained in the decision, if any.

(f)

A decision regarding benefits not appealed to the appeals panel, as provided by the Texas Labor Code, §410.202 and Chapter 143 of this title, becomes final on the sixteenth day after the date received from the division of hearings. Parties shall comply with a final decision or order within 20 days of the date it becomes final as provided by the Texas Labor Code, §410.208.

(g)

A decision regarding benefits appealed to the appeals panel as provided by the Texas Labor Code, §410.202 and Chapter 143 of this title, is binding on the parties and payable during an appeal to the appeals panel unless superceded by an interlocutory order contained in the decision, if any.

(h)

Parties shall comply with a decision regarding benefits appealed to the appeals panel that does not contain an interlocutory order by issuing and delivering payment of accrued and unpaid income benefits no later than the fifth day after filing a written request for appeal with the appeals panel as provided by the Texas Labor Code, §410.202, and Chapter143 of this title.

(i)

Payment of accrued and unpaid income benefits paid in accordance with a decision shall include interest pursuant to the Texas Labor Code, §408.064 and §408.081.

(j)

Payment of medical benefits pursuant to a decision shall be made in accordance with Chapters 408 and 413 of the Texas Labor Code.

§142.20. Interlocutory Orders

(a)

The hearing officer may enter an interlocutory to pay all or part of income benefits or medical benefits.

(b)

An interlocutory order contained in a decision supercedes the decision as it pertains to the payment of income benefits or medical benefits and remains in effect until:

(1)

the decision becomes final in accordance with §142.16(f) of this title (relating to the Decision);

(2)

the decision of the appeals panel is issued pursuant to the Texas Labor Code, §410.204, and Chapter143 of this title, if appealed to the appeals panel as provided by the Texas Labor Code, §410.202, and Chapter143 of this title and the decision and order are affirmed or an appeals panel decision reverses the hearing officer's decision and renders a decision;

(3)

reversed or modified by an agreement or settlement, as provided by §147.7 of this title (relating to Effect on Previously-Entered Decisions and Orders); or

(4)

reversed or modified by a subsequent interlocutory order or decision issued after remand from the appeals panel pursuant to the Texas Labor Code, §410.203, and Chapter143 of this title.

(c)

An interlocutory order for payment of income benefits or medical benefits shall be effective on the date signed by the hearing officer.

(d)

A party shall comply with an interlocutory order by issuing and delivering payment of accrued and unpaid income benefits no later than the fifth day after receiving the interlocutory order to pay accrued and unpaid benefits, and shall pay benefits in accordance with the interlocutory order as and when they accrue.

(e)

Payment of accrued and unpaid income benefits paid in accordance with an interlocutory order shall include interest pursuant to the Texas Labor Code, §408.064 and §408.081.

(f)

Payment of medical benefits pursuant to an interlocutory order shall be made in accordance with Chapters 408 and 413 of the Texas Labor Code.

(g)

An interlocutory order contained in a decision will be distributed to the parties as provided by §142.16 of this title (relating to the Decision).

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on April 20, 2000.

TRD-200002819

Susan Cory

General Counsel

Texas Workers' Compensation Commission

Effective date: May 10, 2000

Proposal publication date: November 19, 1999

For further information, please call: (512) 804-4287